The US Federal Reserve and European Central Bank unveiled the meeting minutes, where many ECB members showed the need for an immediate need for action to get rid of the high inflation. Moreover, as the bank showed a case of ending the bond-buying program, the possibility of raising the interest rate before the year-end. On the other hand, the FOMC minutes showed an aggressive movement than expected, where US Policymakers agreed to reduce the balance sheet by 95 billion US dollars per month. Moreover, indications of the 50 basis point rate hike instead of 25 have priced in the US Dollar against other currencies.
The aggressive monetary policy has made the air unclear whether policymakers are still patient about the higher inflation. On the other hand, the post-Covid recovery and the supply chain issue are still present where Russia’s attack on Ukraine shot commodity prices higher to multi-year highs. Moreover, although western countries are putting sanctions on Moscow, Europe is highly dependent on Moscow in energy. In that case, it is still clear how the restriction to Moscow will work.
Forex Technical Outlook for 11 April 2022 to 15 April 2022
The macroeconomic calendar is busy with many economic releases where the BoC and RBNZ rate decisions will be the main focus point for investors. Both BoC and RBNZ are likely to raise the interest rate by 50 bps and 25 bps consecutively. On the other hand, the US CPI m/m is expected to increase from 0.8% to 1.2%, with an unchanged value for core CPI.
Besides, the ECB will announce its interest rate decision on Thursday, where no change is expected. However, the Bank may explain how they are looking for confirmations regarding rate hikes starting from September. Finally, the US retail sales will come on Friday, and analysts expect the current value to increase from 0.2% to 1.0%.
The bullish pressure in the US Dollar index became solid as the recent price formed a bullish rectangle breakout and made a new swing high at the 100.18 level. Therefore, we may expect a bearish correction towards the 98.60 to 98.00 area before showing another attempt to break the current swing high. On the other hand, the break below the 98.00 level would alter the current price structure, which may increase the bearish possibility toward the 96.00 area.
The massive selling pressure in the EUR/USD price from 1.1183 swing high to 1.0836 swing low came with an impulsive pressure, followed by the dynamic 20 EMA resistance. However, the recent price has become corrective below the 1.0900 level, increasing the possibility of a bullish correction in the coming days.
This technical analysis shows a flat RSI a7 37.00 area. On the other hand, the recent prices have become corrective, where the 1.0810 level is the near-term support level from which a buying pressure may come. In addition, the gap between the price and dynamic 50 EMA has expanded, which may boost the buying pressure.
In this context, EURUSD has become tricky here as the broader market trend is bearish and the recent price action is corrective. In that case, a bullish daily close above the 1.0900 level would increase the buying pressure towards the dynamic 50 EMA. On the other hand, a break below the 1.0810 level would increase the selling pressure towards the 1.0600 area.
The selling pressure in GBP/USD is potent as the recent prices are facing a dynamic 20 EMA carry where the broader market trend is bearish. Hence, any bullish correction towards the 1.3100 area would be a potential bearish opportunity for the coming days.
This technical analysis shows how the RSI line is corrective below the neutral 50 level where the test of 30 oversold level is still pending. Therefore, the bearish possibility is valid until the RSI breaks above the neutral 50 level.
Investors will have a volatile week where the US and the UK CPI release might fluctuate the price. Therefore, any weaker than expected US data with a bullish daily close above the dynamic 20 EMA would be a buying sign for the GBPUSD pair. On the other hand, the current selling momentum is valid as long as it trades below the 1.3176 resistance level.
AUD/USD shot higher above the 0.7555 key resistance level and grabbed the buy-side liquidity before aiming lower below the 0.7470 level. As the current price is facing minor support from the dynamic 20 EMA, investors should monitor how the price reacts at this level before setting the price direction.
The above technical analysis shows that the RSI moved lower after testing the overbought 70 levels, but the price failed to breach below the dynamic 20 EMA support. However, bears are more likely to take the price down, followed by grabbing the buy-side liquidity. In that case, investors should find the price below the dynamic 20 EMA with a bearish daily candle.
Traders should find the bearish daily candle below the 0.7420 level to sell in this pair towards the target of the 0.7300 level. On the other hand, any bullish rejection with a daily close above the 0.7480 would extend the current buying pressure towards the 0.7660 area.
The intense bullish pressure in the USD/JPY failed to extend the exhaustion from the 125.13 level. Therefore, bulls regained the momentum from the 121.34 area, pushing the price to test 125.13 to 124.30 supply zone.
The above technical analysis shows how the price resumed the bullish trend while the dynamic 20 EMA and the price gap are still wide. Moreover, the RSI is still above the overbought 70 zones, indicating a possibility of a bearish correction.
Based on the current price structure, the last hope for bulls is at the 125.13 to 124.30 supply zone, from where any intense selling pressure may initiate the correction towards the 122.00 area.
XAU/USD trades sideways, where the choppy price action from 16 March to 8 April is backed by a strong bullish trend. In that case, any sign of the rectangle breakout above the 1965.17 resistance level may resume the existing trend.
The above technical analysis shows that the RSI tends to move higher from the neutral 50 level, which opens the possibility of testing the overbought 70 level. Meanwhile, the dynamic 20 EMA is corrective where any breakout would increase the price momentum in the coming days.
Therefore, long-term bulls should wait for a bullish breakout and the daily candle above the 1965.17 resistance level to test the 2009.58 resistance level. On the other hand, further bearish rejections from the 1965.17 level would extend the current rectangle pattern towards the 1980.48 level.
The bullish Bitcoin factor has become questionable from last week's 8.8% price drop, but the outlook is still supportive for bulls. BTC/USD price forms a bullish symmetrical triangle breakout that makes a new swing high above the 45800.00 resistance level, indicating a bullish structure break. Therefore, although the current price trades bearish below the dynamic 20 EMA, the broader outlook would remain bullish.
According to, IntoTheBlock’s Global In/Out of the Money (GIOM) model, the immediate resistance is at the 50491.00 level from where roughly 3.32 million BTC are “Out of the Money.” Moreover, Whales accumulation on the BTC has increased where wallets holding 1K t0 10K BTC have increased from 2,034 to 2,166 in recent days.
The above technical analysis shows how the price retraced lower below the dynamic 20 EMA that pushed the RSI below the neutral 50 level. However, the correction after the bullish symmetrical breakout might test the demand level at the 40470.00 area before showing any bullish signal.
In this context, BTCUSD may extend the current selling pressure towards the 40470.00 level, following the sell signal from the dynamic 20 EMA and RSI. On the other hand, a rebound with a bullish daily candle above the 45800.00 may resume the current trend towards the 52000.00 level.
Overall, the US Dollar may lose its momentum against the basket of currencies due to the correction after the massive bullish pressure. On the other hand, the coming trading days will go through a lot of volatility due to many fundamental releases. Therefore, a strong trade management system is applicable these days with regular monitoring of events.